“Big cuts”?

by E.J. McMahon |  | NY Torch

Most news coverage of yesterday’s budget vote reflected the approach of today’s New York Times headline: “Albany Lawmakers Pass Big Cuts in Health Care.” In fact, net of those cuts, the state-funded share of Medicaid spending will increase this year year by more than 8 percent, based on data in the governor’s original 2010-11 Executive Budget documents.

Interested in finding an authoritative, plain-language summary of the health care actions in yesterday’s budget extender bill?   You’re out of luck: neither Paterson’s office nor the Legislature has posted so much as a news release on their websites.  As New York’s state budget deficit gets larger, hard budget data from official sources is becoming even more scarce than usual.

Think of it: including yesterday’s $50 billion Medicaid appropriation, the Legislature has now adopted roughly 40 percent of the entire state budget for 2010-11, without producing a scrap of supporting documentation to explain the financial plan impact.  Amazing, even by Albany standards.

Fantasy in, fantasy out

The health care budget changes approved by New York’s Legislature yesterday include a requirement for state “prior approval” of private health insurance premiums.  Governor Paterson has claimed that this single regulatory action will reduce Medicaid spending by $220 million over the next two years.  However, as I wrote in a recent article on this subject:

That estimate is dubious, to say the least. A business-sponsored study by the actuarial firm of Milliman Inc. estimated that the savings from prior approval would be minimal in 2010-11, and hundreds of millions below the governor’s projections for subsequent years.

Numbers aside, the dispute over prior approval exposes the foursquare wackiness of health care finance, New York style:

  1. The state government heaps billions in taxes and costly coverage mandates on private coverage, inevitably resulting in
  2. higher health insurance premiums, leading state officials to complain that
  3. too many people are migrating from private coverage into publicly subsidized programs, like Medicaid’s Family Health Plus, which
  4. the same officials have been steadily expanding, yet fret have grown too large.

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.